Banks to customers: Use SMS alerts to combat fraud

To safeguard against frauds, all bank customers have been urged to subscribe to a mobile alert service.

“All customers should subscribe to a Short Messaging Service (SMS) alerts by banks so that account holders are aware of all their transactions,” a senior industry official opined to the Business Times. He said with SMS alerts any transaction on a particular account is immediately ‘alerted’ to the customer. While all banks have this facility, only some use it as a mandatory service. This discussion came on the back of reports of some transaction card data being compromised early this week through Automated Teller Machine (ATM) skimming activities, where cloned cards were created to make fraudulent withdrawals.

The Payment Card Industry Association of Sri Lanka and the Sri Lanka Banks’ Association ( Guarantee) Ltd in a joint statement said that soon after receiving the complaints, member banks have taken prompt action to attend to the complaints received and credit the accounts upon verification. The fraudsters, of foreign origin were caught.

Nanda Fernando, Managing Director Sampath Bank told the Business Times that Sampath hasn’t got any complaints on such frauds done on their cards, but it’s possible that cards can be skimmed from any ATM.

Credit card skimming is where offenders use a small device to pilfer information in a credit or debit card transaction. When such a card is swiped through a skimmer, it captures and saves all details stored in the card's magnetic stripe which holds the credit card number, the expiration date and the credit card holder's full name. Crooks use the stolen data to make fraudulent purchases.

Credit card skimmers are often placed over the card swipe machine on ATMs and the skimmers can be placed over almost any type of credit card reader.

ATM hacking incidents were reported on Seylan Bank, Nations Trust Bank, Commercial Bank and National Savings Bank ATMs but most officials couldn’t be contacted to verify this. Commercial said that some complaints were made on unauthorised transactions but they were dealt with.

The Central Bank (CB) in a statement on Wednesday said that payment cards provide customers the convenience of withdrawing cash through ATM network and transacting through merchants worldwide, but there is a possibility that ATM and card reading machines can be abused by criminals in order to steal customer funds from their accounts. “To mitigate such incidents, international payment card security standards and best practices have been adopted in Sri Lanka’s ATM and payment card network, such as issuance of cards with increased security which have an electronic chip (EMV) and provide for SMS alerts for all electronic transactions.”

The statement added: “Efforts of banks, payment card issuers, acquirers and regulators need to be supported and recognised by customers in order to safeguard any payment system. In order to strengthen the security of ATM transactions, customers are required to use EMV enabled payment cards. The EMV enabled cards carry an electronic chip which is visible at the front of the card. If the card used by a customer is not EMV enabled, a request can be made from the relevant bank to issue an EMV enabled card.”( DEC)